"Traders are already fretting about the
possibility of a strike on Iraq and a Venezuelan dispute
overlapping," , said Lawrence Eagles at GNI.
US crude oil prices rose to $32 a barrel for the
first time in almost two years on Monday.
London's International Petroleum Exchange, the
world's leading oil market, reopens for business on Friday for a
Fears of war were heightened when an Iraqi plane shot
down and unmanned US Predator spy plane in Iraq's southern no-fly zone.
On Monday, US Defence Secretary Donald Rumsfeld
stoked up global tension by threatening North Korea with military
action, suggesting a two-front war.
Oil prices were also driven by events in Venezuela
where a strike by right-wing business groups and unions against leftist
President Hugo Chavez' rule has entered its fourth week.
Mr Chavez said his administration had restarted oil
output and exports but the state-owned oil company Petroleos de
Venezuela (PDVSA) said production had fallen to less than 7% of November
Talks between the two sides have been suspended until
Venezuela, the world's fifth largest oil exporter,
normally supplies more than 13% of US oil imports.
DEAL WITH OIL MAJORS WITHIN 2 MONTHS
Saudi Arabia hopes to close within the next two
months a deal with foreign oil majors over multi-billion-dollar gas
projects stalled for more than a year, the country's foreign minister
"We have received a generally positive response
from the third consortium," which is led by Royal Dutch/Shell, and
includes TotalFinaElf and Conoco, to develop the Shaybah fields, Prince
Saud al-Faisal said.
"Only one point remains to be sorted out. We
hope this point will be dealt with and, if this happens, we will sign
the deal," said Prince Saud, who heads the ministerial committee
conducting talks with the foreign oil companies.
"There are indications that the response of the
first consortium will be positive. We expect to reach a clear result
within the next two months," he told a press conference.
The first and second consortia to develop the South
Ghawar and the Red Sea fields are led by ExxonMobil.
BP Amoco and Phillips Petroleum were chosen in the
South Ghawar and Occidental and Marathon in the Red Sea group.
The Saudi government made a final offer to the
companies in early September following a series of negotiations and a
meeting between Crown Prince Abdullah bin Abdul Aziz and the CEOs of
ExxonMobil and Royal Dutch/Shell.
The firms signed preliminary agreements in June 2001
for the projects expected to require 25 billion dollars of investments.
But talks to close a final deal have been stalled with differences on
details of the commercial terms.
The projects also include water desalination, power
and petrochemical plants.
Prince Saud said the projects are "huge,
unprecedented in the region and highly complex," justifying the
long time the talks have taken so far.
GOVERNMENTS MUST EXIT BUSINESS: AL GHURAIR
The Arab world's financial system is not sufficiently
equipped to absorb the funds coming back from the West, hence it is high
time regional governments exit their successful businesses and pave way
for their privatisation, according to a leading private sector business
Abdulaziz Al Ghurair, CEO of Mashreqbank and one of
the top businessmen in the region, said he hoped the Dubai government
would free its money from some of the commercially successful businesses
so that the funds flowing back to the country find proper avenues of
Around $1 trillion of Arab funds are estimated to be
parked outside the region in the form of financial instruments such as
securities and bank deposits and other debt instruments, of which over
Dh500 billion are said to be from the UAE alone. Saudi Arabia and Kuwait
also boast big shares in such funds.
ISRAELI TROOPS KILL 7 IN W.BANK, RE-ENTER BETHLEHEM
Israeli troops shot dead seven Palestinians in raids
across the West Bank and swept back into Bethlehem to reimpose a curfew,
ending a brief Christmas respite from occupation.
The flurry of Israeli army operations drew vows of
revenge from Palestinian militant groups, aggravating hostilities which
the United States wants kept in check to help it cultivate Arab support
for possible war against Iraq.
In Bethlehem, troops fired teargas at Palestinians
shopping near the town centre, ordering them by loudspeakers to return
home, and resumed patrols in front of the ancient Church of the
Nativity, which Christians revere as Jesus's birthplace.
STAGE SET TO FORM FIRST GULF REINSURANCE FIRM
Representatives of the Gulf insurance industry
recently approved the establishment of the first reinsurance company
fully owned by the GCC, said Bahraini officials.
Its capital has not been declared though it is
expected to cross $300 million, they said.
The firm will be owned by the Gulf private sector and
GCC governments will only supervise its operations.
The meeting formed a committee to study the proposal
in six months and prepare a feasibility study.
Sixty representatives of regional insurers met to
examine a recommendation by GCC commerce ministers to set up the
company, following the huge increase in reinsurance premiums after the
September 11 attacks.
The ministers had said that setting up the company
would reduce dependence of GCC companies on international firms, which
have sky-rocketed their prices over the past two years.
CELLPHONES IN ARAB WORLD RISE TO 23.7M
The number of mobile phones in use in the Arab world
reached 23.7 million by November, compared to 23.35 million fixed lines
over the same period, according to a survey released by Madar Research
The 23.7 million mobile phone subscribers constitute
only about eight per cent of the Arab population, compared with a world
average of 17 per cent.
At an estimated growth of 52 per cent, the mobile
phone subscriber base will cross 24 million by the end of the year, and
widen the margin between mobile phones and fixed lines by close to one
IRAQ WAR COULD BOOST TERRORISM: RUSSIA
Russia warned that a war on Iraq could distract the
world's attention away from the ongoing military campaign in Afghanistan
and ease the spread of international terrorism.
"Switching the focus off Afghanistan and
shifting it to Iraq may augment the threat of international terrorism
which is coming from Afghan territories that are not under Kabul's
control," Deputy Foreign Minister Yury Fedotov said while talking
to the ITAR-TASS news agency.
IRAN, IRAQ WANT BORDERS OPENED
Iraq and Iran asked the United Nations to authorize
opening of borders between the two countries for transfer of goods under
the UN oil-for-food programme for Baghdad, officials said.
The crossing point would be the first between
longtime enemies Iraq and Iran to be set up under the UN humanitarian
programme, which was established in 1996 to enable Baghdad to buy food,
medicines and other civilian goods with the proceeds of its oil sales.
IRAQ STOCKPILES FOOD FOR WAR
Iraq said it had boosted food rations to let citizens
stock up before a possible war with the United States, and accused U.S.
and British planes of bombing civilian targets, including a mosque.
Iraqi Trade Minister Mohammed Mehdi Saleh told that
supplies distributed so far should ensure everyone had enough to last
YEMEN, KUWAIT TO SIGN SECURITY PACT
Yemen and Kuwait are preparing to sign a security
cooperation agreement, official sources revealed said.
"A security cooperation agreement between Yemen
and our brothers in Kuwait is being discussed with Yussef Abdulah Al
Aunaizee, Kuwaiti ambassador to Sanaa," a state-run newspaper
quoted Mutahar Rashad Al Mesri, Yemeni Deputy Minister of Interior as
BANK MUSCAT ACTS TO CURB BAD LOANS
Bank Muscat, the largest bank in Oman, has taken the
lead in identifying the malaise affecting profitability of banks in the
region and has initiated steps to arrest it.
Several Omani banks have been victims of bad loans
during the past couple of years, especially in the last two years.
Bank Muscat recently conducted a two-day training
programme on management of non-performing assets (NPAs) in Muscat for
NIGER DENIES SELLING URANIUM TO IRAQ
The prime minister of Niger, Hama Hamadou, has
admitted that Iraq tried to buy uranium from it in the 1980s, but he
said the offer had been rejected.
The US State Department last week accused Baghdad of
seeking to procure uranium from Niger for the creation of nuclear
weapons, and omitting this from its arms declaration to the United
IRAQ: UN FINDS NO BANNED WEAPONS
Inspectors visited Baghdad's Technical University
Iraq says that after a month of "intrusive, extensive and sometimes
aggressive" inspections, the United Nations has found no evidence
that Baghdad has weapons of mass destruction.
BLAIR RENEWS CALL FOR MID-EAST PEACE
Blood was spilled in the West Bank on Boxing Day
Prime Minister Tony Blair has called on the international community to
help implement the plan for peace in the Middle East.
In an article for newspapers in the Arab world, Mr
Blair said "the roadmap" for peace, drawn up by the European
Union, United States, United Nations and Russia, was a "practical
way of setting out the steps to the creation of a Palestinian state,
alongside Israel, by 2005".
RUSSIA FORGES AHEAD WITH IRAN REACTOR
Russia and Iran have agreed to speed up the
construction of the Islamic republic's first nuclear reactor, in the
face of strong American criticism.
Russian Atomic Energy Minister Alexander Rumyantsev
and the head of Iran's Atomic Energy Organisation, Gholamreza Aqazadeh,
finalised details in Tehran.
POPE WARNS AGAINST IRAQ WAR
Pope John Paul II has made a Christmas plea to avoid
a war in Iraq, where UN weapons inspectors have carried out more
searches of suspect sites.
In his traditional Christmas Day message, Urbiet Orbi,
the pontiff also called for all religions to end the conflict in the
Holy Land, describing it as a "senseless spiral of blind
BUSINESS IN BETHLEHEM LIES IN TATTERS
For the first time in living memory the West Bank
city of Bethlehem has no tree or decorations in Manger Square this
The old stone streets around the Church of the
Nativity should have been crowded with tourists.
Workshops should have been turning out olive wood
souvenirs ahead of the Christmas rush.
But business has ground to a standstill since the
latest bout of unrest broke out just over two years ago.